Also the price of steem is going down as we see the market spread out to other coins like PAL LEO and god knows what else.

So the people selling SteemEngine coins are automatically selling the Steem they receive?
I'm not.

All of the Steem that gets turned into SteemPeg is essentially locked just like Steem Power is.
Adding value to the network doesn't lower the price. Quite the opposite.
That's exactly like saying ERC-20 tokens devalue Ethereum.